HC Deb 07 September 2004 vol 424 cc98-102WS
The Minister of State, Department of Health (Ms Rosie Winterton)

On 17 January 2003, the Office of Fair Trading (OFT) published its report "The Control of Entry Regulations and Retail Pharmacy Services in the UK". It recommended abolition of the current restrictions on National Health Service pharmacy applications known as "control of entry".

On 17 July 2003 the Government published their response to the report for England, in which they announced their intention to move cautiously in the direction recommended by the OFT.

In summary, the package of measures proposed first the introduction of new criteria of competition and choice to the current regulatory test. Secondly they would exempt completely four types of pharmacy applications from that test. These four exemptions would apply to applications in respect of large shopping developments over 15,000 square metres (though we will not now include town centre developments); to pharmacies intending to open more than 100 hours per week; to pharmacies which are part of consortia developing new one-stop primary care centres; and to pharmacies which would be wholly internet or mail-order based. Finally, we would further reform and modernise the current regulatory system.

We issued a consultation document on 29 August 2003, "Proposals to Reform and Modernise the NHS (Pharmaceutical Services) Regulations 1992", which explained these proposals in more detail and sought views on how best to implement the package of measures; 270 responses were received. A summary of those responses is available on the Department's website at www.dh.gov.uk/mpi.

We also set up an expert advisory group, the advisory group on the reform of the NHS (Pharmaceutical Services) Regulations 1992, under the chairmanship of Mrs. Anne Galbraith, chair of the Prescription Pricing Authority. Its role was to advise how best to implement the proposals, taking account of the OFT report and responses subsequently received, and to offer further advice. We received the group's report in January this year. We published the executive summary of their report in March. This is available on the Department's website at http://www.advisorybodies. doh.gov.uk/pharmacyregulationconsultation/execsum.htm. We will publish the group's full report later this year when we bring forward the necessary regulatory changes.

We took careful account of the advisory group's report and recommendations and the responses to the consultation in drawing up our plans for implementation. Stakeholders from a wide range of key interests were represented on the group. These included patients and consumers, the NHS, pharmacists and health professions as well as those with experience of competition and regulatory reform. The group provided constructive and valuable advice. In order to end any uncertainty for patients, for the NHS and for community pharmacies, I announced on 18 August that the Government had accepted the great majority of their recommendations in relation to the proposals set out in the consultation document and would now proceed to implement them, but with some amendments.

We will work to introduce the new criteria of competition and choice to the current regulatory test through secondary rather than primary legislation. We also intend to develop criteria for primary care trusts (PCTs) to reject administratively any application which does not undertake to provide the required essential pharmaceutical services under the proposed new contractual framework for community pharmacy. Similar arrangements will be made for appliance contractors. We intend these criteria to be rolled out to all PCTs later this year subject to our ongoing discussions with the Pharmaceutical Services Negotiating Committee (PSNC) and NHS Confederation to finalise the details of that framework.

We will proceed with our plans to exempt four types of pharmacy application from the control of entry test.

However, we will not exempt pharmacy applications for town centre shopping developments over 15,000 square metres. The exemption would still apply to out-of-centre and out-of-town developments as we originally proposed. Such exempted developments will be included in a published list and a provisional list is now available on the Department's website at www.dh.gov.uk/mpi. We are considering further how the list is to be updated and will provide more information when we bring forward the draft changes to the regulations. Pharmacies, which have hitherto found difficulty in gaining a NHS pharmacy contract in shopping developments in town centres, will nonetheless be able to apply to their local PCT for admission to the pharmaceutical list under the reformed regulatory test, when it is introduced, or to make use of the exemption to open more than 100 hours per week.

For pharmacies which intend to open for more than 100 hours per week, we will include a requirement for PCTs to remove from their pharmaceutical list any pharmacy that consistently fails to meet the terms of the exemption unless there is good cause—for example, a fire causing temporary closure.

Applications from members of a consortium establishing a new one-stop primary care centre will also be exempted, provided the centre provides a regular, comprehensive range of services and serves a substantial population of 18,000 to 20,000 patients. The exemption will only apply to centres which are part of the local PCT's strategic service development plan or equivalent written service development strategy. Such centres will, in addition to usual general practitioner services, offer a wide range of primary and community based services, such as dentistry, optometry, podiatry, or other social or community services. The Regulations will define a consortium and specify governance arrangements. Guidance for PCTs will cover situations where a service provider withdraws from a centre so that this does not require the closure of the exempted pharmacy.

Applications for wholly mail order or internet-based pharmacy services will similarly be exempted and we will apply a number of measures to ensure such pharmacies provide a fully professional service within the provisions of the new contractual framework. Internet pharmacies, as with all retail pharmacies in England, Wales and Scotland, must be registered with the Royal Pharmaceutical Society of Great Britain (RPSGB). All pharmacies, whether or not they provide online services, are subject to the same statutory requirements; and to the RPSGB's requirements including standards; inspection arrangements; and code of professional ethics.

We will also introduce regulatory safeguards to protect against manipulation or abuse of the new freedoms. For example, the four exemptions will require applicants to provide a full and prescribed range of services. These would be for local determination by the PCT in relation to the first three exemptions, or nationally determined by the Department in discussion with the NHS in relation to the exemption for wholly internet or mail order based pharmacies. Apart from dispensing prescriptions, such services might include managing a patient's repeat medication, helping patients get the best from the medicines they are taking and promoting healthier lifestyles. For example, pharmacies are well placed to provide support for people at risk of coronary heart disease, giving advice on stopping smoking, or how to improve nutrition or physical activity.

Key elements of our proposals, including the four exemptions, are either implicitly or explicitly linked to the delivery of pharmaceutical services under the new contractual framework. Our plan is to implement these reforms in tandem with that framework. The Department has held tripartite negotiations on the framework with the PSNC and the NHS Confederation for the last 18 months. On 24 August, the PSNC accepted our offer of funding subject to final agreement on a number of detailed issues which we are discussing with them and the NHS Confederation. We aim to conclude these as soon as possible. We will prepare and consult on the necessary regulatory changes and aim to implement the reformed regime as soon as is practicable thereafter.

Guidance for the NHS on how to implement the regulations was last drawn up in 1992. An overhaul is long overdue. So we will amend this information to bring it fully up to date to assist PCTs in implementation. This would include developing supplementary questions to inform PCT assessments of pharmacy applications. We will also propose enhanced data collection from PCTs, subject to approval by the body overseeing NHS data requirements, to inform assessment of progress on our package of reforms and evaluate the impact of these exemptions in 2006.

We will also take additional steps as proposed to further modernise and reform the current system through a combination of regulatory and administrative changes.

PCTs will be able to invite applications from contractors. We will revise the application forms to reflect the criteria that PCTs use in assessing applications. We will require PCTs to reach a decision on an application within four months of the due date for receipt, unless there is good cause. We will also require them to consult widely with patient, consumer and local community groups that have a direct interest in local pharmaceutical provision, and set an administrative minimum consultation period of 45 days.

We will introduce an automatic exemption for all minor relocations under 500 metres, but retain the discretion for PCTs to override this where there is good cause. An example of this would be where geographical obstacles or transport difficulties would affect continued access to pharmaceutical services. Similarly there will be a minimum 12-month trading period requirement before a further application for a minor relocation can be accepted, unless, again, the applicant shows there is good cause.

We will remove the current restriction, which prevents cross-PCT boundary minor relocations, but ensure there are means to remove the contractor from the list of the PCT he is leaving and the receiving PCT agrees to the relocation.

We will retain the concept of preliminary consent for a pharmacy application, but will limit the maximum period for grant of such consent to six months.

Similarly, we will provide for a maximum period of grant of full consent of nine months. We will also enable PCTs to have the discretion to require an applicant to commence pharmaceutical services within a given period not exceeding three months unless there is good cause.

In addition, we will introduce two measures proposed to us by the advisory group. We will allow PCTs to set a fixed date every month for the receipt of applications and we will require PCTs to deal with applications that do not require local consultation within a maximum of 30 days.

However, we will retain in guidance the long-stop discretion which enables PCTs to decide competing applications of equal merit on the basis of the first past the post.

We will also reform the appeals system. We will allow appeals for change of ownership to be combined with appeals concerning minor relocations.

Certain of our proposals would require primary legislation. When parliamentary time permits, we will consider introducing new legislation to enable reasonable charges, but not full cost recovery, for pharmacy applications to be introduced. We will also consider enabling PCTs to take into account, when assessing applications, the improvements they would bring to the provision of, or access to, over-the-counter medicines and other healthcare products. We do not intend, however, to introduce legislation to enable charges to be levied for appeals. We would consult further on such legislation.

We also plan to introduce, subject to further discussions, measures developed by the Pharmaceutical Services Negotiating Committee and the General Practitioner's Committee of the British Medical Association and the Dispensing Doctors' Association to reform the rules governing NHS rural dispensing. These bodies reviewed their proposals in the light of the Government response to the OFT report, presented their findings to the advisory group which in turn recommended they should proceed. Officials from the Department have met these organisations recently to hold further discussions on how best the reforms should be introduced to the current legislation. We aim to implement these in tandem with the other reforms I am announcing today.

The measures I have announced represent an important step forward for community pharmacy services and our ambition to deliver a balanced package of reform measures. They will raise standards for patients, encourage innovation and excellence in service provision whilst at the same time supporting community pharmacies, many of which are small businesses. Community pharmacies provide a highly valued service and we are committed to their ongoing development and integration in the NHS. We also want to ensure that our reforms do not mean that services to more vulnerable groups of patients or those in deprived or rural areas suffer.

We are determined to improve access to, and the choice of, pharmacy services so that community pharmacy is recognised as a key player in the provision of NHS services. These reforms will provide an environment in which community pharmacy services can thrive.

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